Court Of Appeals Denies Jury Trial On Motion To Void Collaborative Law Agreement

In the case of Kiell v. Kiell (September 5, 2006), the North Carolina Court of Appeals held that a party claiming fraud in the inducement of a collaborative law agreement was not entitled to a jury trial.  Rather, the Court found that the trial court’s obligation was to summarily determine whether there was the existence of a valid agreement.

In the Kiell decision, the parties entered into a collaborative agreement wherein they agreed to settle the issues arising from the dissolution of their marriage and would commit to do so without court intervention.  The collaborative law agreement contained a special provision that if any issues arise about which agreement cannot be reached, that the parties would submit the matter to mediation or binding arbitration under the North Carolina Family Law Arbitration Act.  In spite of this, the Plaintiff filed a complaint in the district court seeking a divorce from bed and board, post-separation support, alimony, attorney’s fees and equitable distribution, and included a claim to rescind and invalidate any purported collaborative law agreement between the parties.

The Plaintiff’s claim for a jury trial, although upheld by the trial court, was denied by the Court of Appeals on the grounds that the determination of the existence of a valid arbitration agreement was a matter for the court and did not require a jury trial under the North Carolina Constitution.  The case was remanded to the trial court for the trial court to summarily determine whether the collaborative law agreement contained a valid arbitration clause in light of the Plaintiff’s claims.

By: M. Douglas Berry, Family Law and Divorce Lawyer
Greensboro, North Carolina

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A Person Signing A Separation Agreement Is Responsible For Reading And Understanding The Terms

In the case of Nix v. Nix (January 17, 2012), the North Carolina Court of Appeals held that an unrepresented individual who signed a separation agreement should be held to the terms of the agreement even though he may not have understood the wording or the legal implications.  The Court of Appeals held that a person signing a separation agreement is under a duty to read it for his or her own protection and is ordinarily charged with knowledge of its contents and the legal effect of its terms.  When the agreement is clearly expressed, then both parties are bound by the language contained therein.  The failure to read it or the failure to obtain legal advice prior to signing it or a party’s ignorance of the relevant law is irrelevant.  Absent special conditions of coercion, duress or procedural and substantive unconscionability, a party is stuck to the terms of the agreement he or she signs.  In the Nix case, the pro se party complaining about the agreement had possession of the agreement for some time and had more than ample opportunity to seek advice and to get help with understanding its terms.  The lesson of Nix is that one who signs a legal document, in particular a separation agreement and property settlement, does so at his or her own risk.

By: M. Douglas Berry, Family Law and Divorce Lawyer
Greensboro, North Carolina

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Father’s Name on Birth Certificate Creates Presumption of Paternity

In a recent decision filed January 17, 2012, the North Carolina Court of Appeals in the matter of J.K.C and J.D.K held that when a child’s birth certificate identifies the father, he is presumed to be the biological father of the child.  The North Carolina courts have long held that a child born to a married couple while they are still legally married and before the entry of an absolute divorce is presumed to be a child born of the marriage.  The J.K.C. and J.D.K. decision added the birth certificate father to this presumption.  Both presumptions, however, are rebuttable.

In re J.K.C. and J.D.K. held that the placement of the father’s name on the birth certificate creates a rebuttable presumption that the father has taken the legal steps necessary to establish paternity, otherwise his name logically could not appear on the birth certificate.  The Court of Appeals dealt with a specific statute, 7B-1111(a)(5), which provided that the trial court may terminate parental rights of the father of a juvenile born out of wedlock when the purported father has not established paternity judicially or by affidavit.  Since the placement of the name on the birth certificate does, in fact, require such determination of paternity by affidavit or judicially, the birth certificate designation of the father was elevated to the status of creating a presumption of paternity.  The practical impact of this is that although a presumption by itself will establish paternity, it can be rebutted by contrary evidence specifically including DNA testing.  Where there is a legitimate question of paternity, the Court must consider all the facts and circumstances.  The presumption created by the name on the birth certificate in many cases is just a starting point.

By:  M. Douglas Berry, Family Law and Divorce Lawyer
Greensboro, North Carolina

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Court Of Appeals Denies Jury Trial On Motion To Void Collaborative Law Agreement

In the case of Kiell v. Kiell (September 5, 2006), the North Carolina Court of Appeals held that a party claiming fraud in the inducement of a collaborative law agreement was not entitled to a jury trial.  Rather, the Court found that the trial court’s obligation was to summarily determine whether there was the existence of a valid agreement.

In the Kiell decision, the parties entered into a collaborative agreement wherein they agreed to settle the issues arising from the dissolution of their marriage and would commit to do so without court intervention.  The collaborative law agreement contained a special provision that if any issues arise about which agreement cannot be reached, that the parties would submit the matter to mediation or binding arbitration under the North Carolina Family Law Arbitration Act.  In spite of this, the Plaintiff filed a complaint in the district court seeking a divorce from bed and board, post-separation support, alimony, attorney’s fees and equitable distribution, and included a claim to rescind and invalidate any purported collaborative law agreement between the parties.

The Plaintiff’s claim for a jury trial, although upheld by the trial court, was denied by the Court of Appeals on the grounds that the determination of the existence of a valid arbitration agreement was a matter for the court and did not require a jury trial under the North Carolina Constitution.  The case was remanded to the trial court for the trial court to summarily determine whether the collaborative law agreement contained a valid arbitration clause in light of the Plaintiff’s claims.

By:  M. Douglas Berry, Family Law and Divorce Lawyer
Greensboro, North Carolina

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Buyer Beware

A client called regarding a home he purchased at a foreclosure auction.  The house is rented, and the tenant sent to the client a letter addressed to “the estate of the previous owner.”  A second foreclosure is now in progress.  The client did not have a title search performed prior to bidding at the auction.  The client actually bid on a second mortgage foreclosure.  Thus he bought at a sale,  subject to a first mortgage.  Not paying the first mortgage caused it to go to foreclosure.

As our client discovered, buying at a foreclosure sale is risky.  It is important to search the title before bidding at an auction, to be sure you know what is being sold.  Our client now must decide if he wants to cut his losses and walk away, or buy in at the second sale and try to protect his investment.

If you are considering purchase of land at auction, be sure to get a title search before you bid.

Gabriel Berry Weston & Wells, L.L.P.
Richard W. Gabriel

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Husband’s Failure To Disclose Assets Is Basis For Constructive Fraud

In the case of Searcy v. Searcy, the Court of Appeals in a decision filed September 20, 2011, reversed the trial court and found that there was an issue of fact with regard to constructive fraud when the husband failed to disclose the existence of promissory notes for two particular beach lots that were sold during the marriage.  The Court of Appeals found that a fiduciary relationship existed between husband and wife.   A duty to disclose arises where a fiduciary relationship exists between the parties through a transaction.  The relationship of husband and wife creates such a fiduciary duty.  During a marriage, a husband and wife are in a confidential relationship and have a duty to disclose all material facts to one another and a failure to do so constitutes fraud.  However, this fiduciary duty ends when the parties separate and become adversaries negotiating the terms of their separation.  Furthermore, the termination of the fiduciary relationship is firmly established when one or both of the parties is represented by counsel.  However, the mere involvement of an attorney does not automatically end the confidential relationship.  The mere fact of the parties being separated in and of itself is not determinative of the existence of a fiduciary relationship.  When the parties originally divided their assets, the husband failed to disclose the existence of two promissory notes for Lots 17 and 18 and wife never knew that they existed.  The subsequent separation agreement made no mention of notes for Lots 17 and 18. The Court of Appeals found that the fiduciary relationship between husband and wife still existed at the time the Defendant husband first failed to disclose the purchase money notes.  Therefore, wife had a claim for constructive fraud.

By:  M. Douglas Berry, Family Law and Divorce Lawyer
Greensboro, North Carolina
www.gabrielberrywestonlaw.com

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When should you update your Estate Planning Documents?

Have things changed in your life since you signed your Estate Planning documents? Regardless of your age, family situation, career path, I would be expect those circumstances have changed. As an attorney, as a father, as an investor looking to retire some day, I know things change – often quickly – and sometimes in ways we don’t recognize.

I recommend that you review your Estate Planning documents about once a year. To me, the best time to do this is when you prepare your income taxes. That is a point that most people generally have their financial life laid out in front of them.  When getting your taxes ready, spend some time re-reading your documents and make sure they still say what you want. Further, about every five years, I recommend you review your estate planning documents with a qualified estate planning attorney. Remember, it’s not just circumstances that change, laws do too.

by:

Robert A. Wells

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Collaborative Law: Codified Under North Carolina Statutes

Effective October 1, 2003, the general concept of collaborative law was given statutory life through Article 4 of the General Statutes of North Carolina, Sections 50-70 through 50-80.  Collaborative law was officially established as an alternative to the judicial disposition of issues arising out of a civil family law action (except for claims for absolute divorce).

A collaborative law proceeding is defined by statute as a proceeding where a husband and wife, contemplating separation or divorce, and their attorneys, use their best-faith efforts to attempt to resolve the disputes on an amicable basis without having to resort to judicial intervention except to the extent necessary to approve settlement agreements and sign orders to effectuate the agreement.

The attorneys agree that they will not, in turn, file any litigation on behalf of their clients, and the clients accept the model of resolving their issues without having to go to court.  The statute requires a written agreement between the parties and their attorneys.  A collaborative law agreement must be in writing, signed by all parties and their attorneys and must include provisions for the withdrawal of the attorneys involved in the event that the collaborative procedure does not result in a settlement of the dispute (N.C.G.S. § 50-72).

A valid, executed collaborative law agreement tolls (holds in abeyance) any applicable statute of limitations, filing deadlines or other time limitations imposed by law or court (hearing dates, trial dates, discovery deadlines and other scheduling orders) (N.C.G.S. § 50-73).

In an ongoing civil action, the filling of a collaborative law agreement stops the procedure with the court and the court shall take no action in the case, including a dismissal, unless the court is notified that the parties have either failed to reach an agreement, voluntarily dismissed the action or asked the court to enter an order or judgment incorporating the agreement of the parties (N.C.G.S. § 50-74).

A collaborative law agreement is entitled to the full faith, credit and force of a court-ordered judgment upon the request by the parties (N.C.G.S. § 50-75).  In the event the parties fail to reach a collaborative law agreement, either party may file a civil action unless the collaborative law agreement provides for the use of arbitration as an alternative dispute resolution.  If a pending civil action has been stayed (held in abeyance), then the court is then given notice that a settlement agreement has not been reached and the court pursues the regular litigation course.

If a civil action is filed pursuant to this section, the attorneys involved in the efforts at collaborative law cannot be the attorneys for the parties in the actual civil proceeding and shall withdraw as attorney of record (N.C.G.S. § 50-76).

Collaborative law proceedings are confidential and are not admissible in any court proceeding.  Any statements, communications or work-products (exhibits, charts, graphs) or any other written or verbal communications or analysis by third-party experts are included in this privilege and are inadmissible evidence  (N.C.G.S. § 50-77).

Collaborative law agreements also incorporate the alternative dispute resolutions including mediation and/or binding arbitration to reach the settlement of any disputed issues that cannot be resolved by agreement.  This is a sensible way to resolve any impasses without the whole process breaking down.  For instance, if the parties need to get an evaluation of a piece of real estate that they cannot agree on, then they can agree to an abbreviated arbitration process wherein an experienced real estate appraiser would be chosen to conduct a hearing and take evidence and enter into a binding arbitration ruling on the question of value.  This process of incorporating alternate dispute resolutions is incorporated in N.C.G.S. § 50-78.

In the unlikely/unfortunate event of death of one party to the collaborative law proceeding, the proceeding can continue and does not have to abate by having the personal representative of the deceased party’s estate continue the collaborative law proceeding (N.C.G.S. § 50-79).

In an attempt to recognize the social utility and financial practicality of promoting collaborative law as an alternative means of dispute resolution, the North Carolina General Assembly and Legislature have given teeth and legitimacy to a collaborative law agreement properly structured between two experienced collaborative law attorneys.

Anyone who is involved in a potential or ongoing court fight over matters of equitable distribution (property settlement), custody, alimony, child support and any other financial issues should seriously consider collaborative law compared to the mutually assured financial and emotional self-destruction that can be involved in a protracted, bitter court fight.

At the end of the day, collaborative law allows the divorcing parties to direct their focus and their resources less on the fight and more on the fix.

If you have any further questions about engaging in the collaborative law process and working out the dissolution of your marriage, contact M. Douglas Berry, Family Law and Divorce Lawyer at www.gabrielberrywestonlaw.com

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Alienation of Affections Verdict – Jurisdiction Upheld Against California Defendant

In the August 3, 2010, case of Brown v. Ellis on remand to the North Carolina Court of Appeals, the North Carolina Supreme Court and the North Carolina Court of Appeals upheld personal jurisdiction of a North Carolina husband for his claim for damages for alienation of affections and criminal conversation and unlawful interference with his marriage in North Carolina.  Although the Court of Appeals reversed the jury verdict based on insufficient notice given to the defendant of his need to be in court for trial, the Supreme Court established the long-arm jurisdiction of North Carolina over residents of other states for interfering with the marital relationship.

The alienation of affections and criminal conversation claims were based on conduct of the defendant which involved no actual physical presence within North Carolina.  The Court of Appeals held that as long as there were minimum contacts with the State of North Carolina, a party who lives out-of-state can be held liable for the breakup of a North Carolina marriage.  Minimum contacts necessary to establish the jurisdictional basis for this claim involve analysis of several factors.

First, the quality of the contacts between the California defendant involved almost daily contacts with the plaintiff’s wife in North Carolina by telephone and e-mail.  The quality of the defendant’s contacts were sufficient when considering that they had the effect of the destruction of the plaintiff’s marriage.  These contacts involve pursuit of a “sexual and romantic relationship with” plaintiff’s wife, and daily contacts which had a direct role in breaking up the marriage.  The interest of North Carolina courts are especially significant because these alienation of affections and criminal conversation torts are not recognized in many states.  In many states one cannot bring an alienation of affections or criminal conversation claim against the defendant because that state does not allow it.  California, in this case, abolished alienation of affections and criminal conversation in 1939.  The inconvenience to a California resident of having to come to North Carolina was outweighed by the totality of these factors.  The Court concluded that traditional notions of fair play and substantial justice are not affected by allowing a California resident to be sued for unlawful interfering with the marital relationship.

The impact of the Brown v. Ellis decision is to recognize the validity of protecting the marital relationship in these modern times of the internet, e-mail, texting, Facebook and other electronic communications.  If an out-of-state party contacts a married person in North Carolina with the intent of endearing himself or herself to that party and pursuing a more intimate relationship to the detriment of the North Carolina resident’s marriage, that interfering party can be held financially responsible for the break-up of the marriage and the financial and emotional havoc which invariable results from the marital dissolution.

By:  M. Douglas Berry, Family Law and Divorce Lawyer
Greensboro, North Carolina
www.gabrielberrywestonlaw.com

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Court Lacks Jurisdiction Over Property Issues

The North Carolina Court of Appeals in a case filed October 4, 2011, in the matter of Tripp v. Tripp, held that the Superior Court of New Hanover County lacked subject matter jurisdiction over the claims by one of the parties filed in Superior Court for quiet title, breach of warranty of title, fraud, unjust enrichment and contribution.  When the superior court action was filed, a Brunswick County action seeking equitable distribution had been previously filed and was still pending.  The Court of Appeals held that when matters of property involving equitable distribution are pending in a district court, a subsequent action filed in superior court involving the same property is improper.  In reaching an equitable distribution of marital property, a court can look at all relevant factors.  Since the issues involved in the equitable distribution case are substantially similar to the claims shared by the party plaintiff in the Superior Court case, the Superior Court had no subject matter jurisdiction.

Richard Gabriel
Gabriel Berry Weston & Wells
Greensboro, NC

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